From Financial Modeling Prep: 2025-03-05 03:02:49

Despite a 15% year-to-date retreat, Bernstein analysts remain positive on Nvidia (NASDAQ:NVDA), noting its underperformance compared to the broader semiconductor market and the S&P 500. Nvidia’s stock trades at a weakened level, signaling a potential buying opportunity.

Nvidia’s valuation has dropped to approximately 25x NTM earnings, near a 10-year low. This decline comes at the start of a new product cycle, with Blackwell product revenues reaching $11 billion in January. Supply constraints are easing, and demand is expected to surpass supply in the upcoming quarters.

While regulatory risks and international exposure remain, Bernstein believes Nvidia’s sales in China are at record levels but represent the lowest percentage of revenue in a decade. Any disruptions from new licensing requirements are expected to be short-term, with limited impact on earnings per share.

Despite challenges, Bernstein remains cautiously optimistic on Nvidia, citing an attractive valuation and strong fundamentals. Easing supply constraints, robust product cycle momentum, and increasing customer capital expenditures support a positive outlook for the company. The market’s current discount may present an entry point for investors.



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